Battles between armies were a staple of Medieval Europe, and any fantasy roleplaying setting that doesn't have such things better have a really good explanation for why that's the case.
Whether it's Hastings, or Bosworth Field, or Agincourt, or the Siege of Acre, warfare between armies was an enormously important part of Medieval life. Peace was the exception, not the norm, and the raising of armies, the recruiting of troops, and the subsequent return of those veterans (the survivors, anyway) had an enormous impact on the culture of the time. Any fantasy campaign that is pseudo-medieval in flavor should have the same sort of background; lots of short, furious wars, a few very long, drawn-out conflicts, and lots of serfs drafted into the armies only to be returned in relatively short order to their farms and masters, with tales of far-off places and perhaps some scars (and certainly some stories) to show off.
The World of Greyhawk embraced this view of Europe, doubtless because of Gygax's background as a wargamer and amateur military historian. The original Folio is replete with wars and battles, including the Battle of a Fortnight's Length and of course the Battle of Emridy Meadows, at which the Temple of Elemental Evil was thrown down by the combined forces of Furyondy and Veluna.
Subsequent embellishments of the setting continued the trend. The wonderful "Greyhawk's World" series of articles in Gygax's "From the Sorcerer's Scroll" column detailed army movements, broke down forces by troop type, and generally contributed to the notion that the Flanaess was alive with armies marching across its lands, often maneuvering, sometimes directly clashing, forever raising troops and disbanding armies. Just like Medieval Europe.
I think having such a state of affairs adds immensely to the feel of a setting as being alive. Having some rules system in place to handle such battles, hopefully with the PCs having some meaningful role, is a plus. But even if the PCs are never involved in a single battle themselves, the mere fact that they hear of such things happening in the background, while they are involved in delving into some lost tomb or investigating conspiracies in some decadent city, the fact that such things are happening around them can only add to the perceived vitality of the milieu.
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